††††† NECESSITY,
FUNCTION, AND CONFORMITY: KRS 247.946(11) permits the corporation to sell at
public or private sale, all or any part of a guarantee made by the U.S.
Government as security for a loan made by the corporation. This administrative
regulation establishes the procedure for selling these instruments to eligible
investors.

††††† 1. Chartered to
do business in Kentucky by the Commonwealth of Kentucky, or by an agency of the
U.S. government; and

††††† 2. Maintaining
an office in Kentucky;

††††† (b) A
broker-dealer registered or authorized to do business as a brokerage firm that
engages in the business of trading and selling securities; or

††††† (c) Any agency
created or authorized by the Agricultural Credit Act of 1987 as amended (12
U.S.C. 2279aa et seq.) or any other federally chartered instrumentality of the
U.S. created by Congress to establish a secondary market for agricultural and
rural development loans.

††††† Section 2.
Requirements for an Investor. Any investor wishing to purchase any guaranteed
portion of a loan shall submit the following for the corporationís review:

††††† (1) A copy of
its annual audited financial reports, including accompanying schedules;

††††† (2) Year-to-date
quarterly financial statements;

††††† (3)
Documentation authorizing the investor to do business in Kentucky, including
licenses and if applicable, certification of good standing from the Secretary
of State;

††††† (4) Resumes of
the principals of the Investor with whom the corporation will be dealing
directly and names and addresses of Kentucky institutions or Kentucky agencies
with whom an investor has completed similar actions to those they wish to
conduct with the corporation;

††††† (5) A copy of a
standard form or other documents used by Investor to purchase guarantees made
by the U. S. Government; and

††††† (6) The most
current weekly report of published rates based upon the length of the loan.

††††† Section 3.
Approval Procedure of the Corporation. Approval of eligible Investors: (1) Upon
the receipt of all requested documentation the corporation at its next
regularly scheduled board meeting shall render an opinion on approval of the
Investor which shall remain in effect for one (1) calendar year from the date
of the boardís decision. The corporation may extend the approval of the
Investor for no longer than ninety (90) days prior to the end of the anniversary
of approval.

††††† Section 4.
Renewal Approvals by the corporation: (1) In order to obtain an extension of
the approval of the corporation the Investor shall provide all of the items
previously enumerated in Section 2 of this administrative regulation within
ninety (90) days from the end of each fiscal year.

††††† Section 5. (1)
Upon the corporationís receipt of a conditional commitment from a U.S.
governmental agency guaranteeing the corporation's loan to a borrower, the
corporation shall send approved Investors notification of the conditional
commitment and shall seek from the approved Investor within three (3) business
days the following:

††††† (a) A quotation
that includes rate and terms for the borrower;

††††† (b) The price to
be paid by the investor to the corporation for the guarantee; and

††††† (c) Pricing
associated with servicing of the corporationís loan.

††††††††††††††† (2) The corporation upon
receipt of this information from any approved investor shall make a decision of
which approved Investor, if any, to utilize in that specific instance. (31
Ky.R. 651; Am. 933; eff. 11-10-2004.)